Case Study on the Role of Fiscal Policy in Hydrogen Development

Baseline Report

Pembina Institute and the Canadian Energy Research Institute

May 10, 2004

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Summary and Next Steps

The purpose of this research project is to examine the role that fiscal policy can play in promoting hydrogen-based energy systems in Canada. The basic methodology employed in this analysis involves the use of microeconomic modelling to evaluate the impact of a set of fiscal policy scenarios on key hydrogen pathways (and associated technologies). This draft baseline report is the first stage in this analysis. Through this baseline report we have:

Provided an overview of the state of hydrogen development in Canada and globally

Identified key hydrogen pathways for further consideration and analysis

Presented the current policy framework governing hydrogen development in Canada

Discussed factors which presently limit market penetration of hydrogen technologies

Evaluated an extensive list of fiscal policies for addressing those barriers

Following this baseline report, the next major component of this research project is to complete an economic analysis of key fiscal policy scenarios. Using the Energy 2020 model, fiscal policy scenarios will be evaluated according to their ability to facilitate market penetration of hydrogen technologies, reduce greenhouse gas emissions and minimize costs.

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